The Good News About Spending

Right now, IDC is calling for IT spending
to grow about 4 percent in 2008 compared with the 8 percent growth the United
States saw in 2007. Minton said it could
take another few months to determine whether IT spending will slow more or even
out. A good deal depends on whether the White House and Congress agree to a
bailout and what impact those funds would have on Wall Street.
Andrew Bartels, an analyst with Forrester Research, said he believes a lot
of spending decisions are different for each individual industry. While banking
and financial services have slowed down, other sectors such as media companies
and health care will continue to spend, although IT managers could become
cautious, he said.

"If you're at Lehman Brothers, you might have to cut 20 percent," Bartels
said. "If you're at Merrill Lynch or if you're at Wachovia and there is
going to be consolidation, then there are certain things that are going to have
to be put on hold because you don't want to make decisions right now.

"If you're outside of those extremes, the much more common approach is
going to be cautious, [to] proceed with what we have and try to avoid major new
commitments. However, you don't want to run [too far] either way."
In the case of PCs, for example, Bartels said he believes spending on new
notebooks and desktops may pick up by the middle of 2009, since the cost of
servicing old PCs could begin to outweigh the cost of upgrades to new hardware.
In addition, many companies have already delayed purchases of new PCs and time
may be running out
One factor that might help is that prices for PCs continue to fall, as
vendors look to cut prices on both the consumer and enterprise sides in order
to keep shipments up for the year.
However, Minton cautioned that IT managers can still hold off on buying servers and PCs
if the companies they work for tighten the budget belt in 2009.
"The first thing companies do is start making
their hardware last longer, and they are able to do that because their hardware
isn't really breaking down," Minton said. "When you talk about PCs,
and to an extent data centers, there are drivers to upgrade this stuff. To an extent,
we have already seen this in sectors that have slowed down in 2008. A big
indication of what an IT company does with its spending can be seen in its
hardware upgrades."